Assembly approves multi-million hospital expansion

Central Peninsula Hospital is moving forward with plans to update its obstetrics wing and to install the Kenai Peninsula’s first catheterization lab.

The hospital, located in downtown Soldotna, has been looking to update the obstetrics department for years and has observed a growing need for a catheterization lab — cath lab for short — in which patients can receive cardiac services like angiograms and pacemaker implantation. Central Peninsula Hospital patients who need such procedures have to go to Anchorage to get them at present.

The Kenai Peninsula Borough Assembly approved an ordinance appropriating $10 million from the hospital’s Plant Replacement and Expansion Fund and authorizing the borough to issue up to nearly $29 million in revenue bonds during its Tuesday meeting.

Of the $10 million, $3.1 million will go to the design cost and approximately $6.9 million to the construction costs, according to the ordinance.

However, the project isn’t going to get started very quickly.

The hospital needs to secure a Certificate of Need from the Alaska Department of Health and Social Services first. All hospitals as well as a variety of other health care facilities in the state are subject to Certificate of Need requirements, which include a state review of proposed expansion projects to prevent inflation of health care costs because of overexpansion.

Central Peninsula Hospital will have to present preliminary plans and a cost estimate to the state before getting the green light to proceed with the application.

The request for proposals still has to go out after the borough’s approval, and all told, the hospital will likely have the plans and cost estimate by next spring, said Bruce Richards, government and external affairs coordinator for the hospital.

“In order for us to even submit (an application, the ordinance) would have to pass,” he said. “The whole thing is predicated on us receiving a Certificate of Need.”

The obstetrics department has occupied the same space on the ground floor since the hospital opened in 1971.

With the addition of the specialty clinics tower on the east side of the hospital’s main building, the department is now situated along a main corridor connecting the two buildings.

Infant security is a concern, although people passing through the corridor either have to be buzzed through several doors or have an escort. The Joint Commission, a nonprofit that certifies health care organizations to receive licensure and Medicare and Medicaid payments, identified infant security as a concern, said Borough Mayor Mike Navarre at the assembly meeting Tuesday.

“It’s something that had been cited there — security for infants in (obstetrics) wards is something nationally that regulations have gotten much more strict on,” he said.

The assembly largely backed the proposal, though several expressed concerns about the cost.

Assembly member Stan Welles voted against the appropriation, saying it was too much in a time of economic downturn, urging the borough to “get out of the health care business.”

Assembly member Blaine Gilman said he supported the buildout because the catheterization lab will eventually help pay for itself because the need is significant. He also said it will help support the eventual transition to a population-based payment system on the peninsula and would remedy the security issues in the obstetrics ward.

“It’s a lot of money, but the cath lab will pay for it,” he said.

Navarre added that the project could also bolster the local economy through the construction work and by bringing catheterization business back to the peninsula. Because of the state’s drastic cuts to the capital budget and generally slow construction industry in the state right now, the bids on the project could be lower now than they would be in the future, he said.

“In addition to getting a project cheaper in a downcycle economy, we also create economic activity in our community,” Navarre said. “We have tried to look at this from the borough’s perspective as objectively as we can, and I think it makes good sense economically to do the project now and the fact that dollars are available to help support the revenue bonds and allow us to do it through revenue bonds, I think, makes it even more compelling.”

Central Peninsula Hospital CEO Rick Davis thanked the assembly for approving the appropriation and said that though it is an expensive project, the total is a fairly manageable number in the grand scheme of the hospital’s total revenue.

If the borough did decide to sell the hospital in the future, the expansion would also make the hospital a more valuable asset, he said.

“I just feel like we have an obligation to the community to deliver the best health care here hopefully that we can, and that’s really our intent in this project,” he said.

 

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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